EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509611
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Pax Australia Pty Ltd applied for a TCO in respect of certain Water Test Baths on 20 July 2005.
Instrument
TCO No 0509611 was made on 30 September 2005. It declares that those certain Water Test Baths are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0509611 is taken to have come into force on 20 July 2005.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted to facilitate and regulate the administration of customs and excise duties in Australia. To address specific trade needs and support certain industries, Part XVA of the Act provides for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The problem this legislation aims to address is the potential economic disadvantage faced by Australian businesses that cannot domestically produce certain goods, allowing them to compete fairly with imported products. This instrument, enacted by the Australian government, seeks to ensure that Australian industries can access necessary goods at competitive rates without being hindered by prohibitive customs duties. This approach supports the policy objective of promoting fair trade practices and facilitating the smooth operation of the economy by ensuring that Australian businesses are not unduly disadvantaged in their operations.
Scope and Application
The Tariff Concession Instrument No. 0509611 under the Customs Act 1901 applies to persons or entities seeking a reduction in customs duty on specific goods, in this case, certain Water Test Baths. The application of this instrument is triggered by an application to the Chief Executive Officer of Customs, who must assess whether the application meets the core criteria set out in the Act, specifically that no substitutable goods are produced in Australia. This concession is available to those who can demonstrate that the goods in question are not produced domestically and that there is no suitable domestic alternative. The instrument has a national reach, operating within the framework of the Commonwealth of Australia, and its application is not restricted to any particular state or territory. The exclusions are clearly defined by section 269SJ of the Act, which lists goods that cannot be subject to a tariff concession order. The instrument’s effectiveness is contingent on the CEO’s satisfaction that the application aligns with the stipulated criteria, and in this instance, the CEO determined that the application for Water Test Baths was valid and made a corresponding order. The commencement date of the instrument aligns with the date of application, ensuring that the benefits of the tariff concession are prospective from the moment the application is lodged.
Key Provisions
The main sections of Tariff Concession Instrument No. 0509611 under the Customs Act 1901, as detailed in the explanatory statement, revolve around the process of granting Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO is satisfied that the application is valid and meets the core criteria as per section 269C, a TCO will be made. This is outlined in section 269P(3), which mandates that the CEO must issue a written order declaring that the goods in question are subject to a specific tariff rate.
In terms of obligations and requirements, the Act imposes several steps that must be followed. Firstly, the CEO must ensure that the application is not for goods specified in section 269SJ, which are ineligible for a TCO. The CEO must also verify that no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. Once these conditions are met, the CEO is required to make a written TCO order, specifying the applicable tariff rate. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any submissions regarding the proposed TCO.
In the case of breaches or non-compliance with the Act's provisions, various consequences may apply. While specific penalties are not detailed in the explanatory statement, the Act generally provides for civil and criminal penalties for non-compliance with customs regulations. These may include fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as other relevant legal provisions.
The explanatory statement does not detail the specific rights and liabilities of parties affected by this TCO. However, it is mentioned that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. Importers, under paragraph 126(1)(r) of the Regulations, may apply for a refund of duty on goods imported since the TCO came into force, which beneficially affects their rights.